FHA Streamline Refinance – Now You Can Refinance Even If Your Credit Stinks
Since you already have an FHA mortgage loan, you already know that it’s easier to qualify for an FHA-insured loan than for a conventional loan and about MIP (mortgage insurance premiums). Chances are, though, that you don’t know about the latest changes that FHA’s made to the Streamline Refinance Program, changes that take it back to its origin, make it… streamlined again (see HUD mortgage statement from February 14, 2011 ). FHA’s done away with credit verification, employment verification, income verification. You could have a credit score way under 500 and you could still qualify.
Before I tell you that they’re not doing it out of the goodness of their heart, let me mention also that it can be done without an appraisal too. Yes, Yep, it’s true. The house you bought with $250,000 can be worth now $175,000 and you can still and you can still refinance your mortgage loan under this program.
and refinancing gets you a ‘net benefit.’. ‘Net benefit’ is defined as: Here’s how FHA defines ‘net benefit:’
1. you have an ARM (Adjustable Rate Mortgage) and are refinancing into a Fixed Rate Mortgage
2. Refinancing gets you a mortgage with payments that are at least 5% lower than your current payments.
Why is FHA doing this if it’s not out of the goodness of their hearts? Because they’re already insuring an FHA loan for you. Remember that the new payments must be 5% smaller. In other words, FHA is letting you let them reduce their risk. I don’t know how many fewer people will default on their FHA-insured loan if their monthly payments are at least 5% lower but I’m positive it’s going to be fewer.
Truly, the FHA Streamline Refinance Program is a great thing. Truly, it’s a pity all lenders aren’t doing something like it with all their mortgage loans. It really is a win-win situation. Of course, some of them have been winning like crazy lately, so they might not care. Of course, some of them haven’t. You’d expect at least those to follow suit. But this is digressing from what’s important for you, namely, reducing your monthly payments and, so, making your life easier.
In the Chicago area? Need to refinance an FHA mortgage? As you’ve seen, FHA Streamline Refinance is a great way to go. Check out the FHA mortgage rates, maybe the time is right for you to go ahead and do it.
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